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September 27, 2016

Two Las Vegas-Based Dietary Supplement Telemarketers Agree to Settlements for Roles in Violating 2014 Court Injunction

Telemarketer Americare Inc. violated ban on calling Iowans, then arranged for Health Center Inc. to complete prohibited sale

DES MOINES – Two Las Vegas-based health supplement telemarketers who allegedly conspired to skirt a 2014 court order barring one of them from selling health products in Iowa have both agreed to resolve their consumer fraud cases after a telemarketer was caught on an undercover phone line trying to make a prohibited sale.

In a consent judgment entered today by Polk County District Court Judge David N. May, Health Center Inc., and company owner Peggy L. Pearce, paid $16,000 to the state for consumer refunds and are barred from future marketing in Iowa.

Attorney General Tom Miller alleges that Health Center made additional fraudulent claims to Iowa consumers in connection with other company products.

On August 10, Polk County District Court Judge Michael Huppert ordered Americare Inc. and its owner, Mario S. Gonzalez, to pay $5,000 for violating a 2014 order barring the company from telemarketing supplements to Iowans and threatened up to $200,000 in additional penalties for future violations.

Undercover Consumer Line Recorded “Outrageous” Americare Sales Pitch
In March, an undercover phone line at the Consumer Protection Division recorded an Americare telemarketer violating the 2014 court order by pitching human growth hormone (HGH) tongue spray to a Consumer Protection Division employee. The Americare representative made what Miller contends were outrageous product claims.

In addition to touting the spray’s “anti-aging” properties, the telemarketer said the product would have a “complete reversal effect” on thyroid disorders, high blood pressure, cholesterol, acid reflux, and, perhaps most notably, type-2 diabetes. The seller also claimed the spray treats psoriasis, fibromyalgia, arthritis, impaired vision, and asthma, in addition to eliminating cellulite, thickening hair, and reducing wrinkles “by 51 percent.”

After obtaining two separate consumer orders for hundreds of dollars’ worth of spray through banned telemarketing calls to Iowa—one from a state employee posing as an elderly Iowan and another from an elderly Iowa consumer—the Americare telemarketer realized the previous court order prohibited her from completing the sales through Americare.

The Americare telemarketer arranged with a Health Center telemarketer to circumvent the order by completing the prohibited Americare transactions through Health Center and splitting the commission.

“Americare insists that these two violations of the ban were isolated and inadvertent mistakes, and denies any wrongdoing or liability,” Miller said. “In any case, having to pay $5,000 with the threat of far larger penalties for future violations should motivate the company to do whatever is necessary to keep its representatives from victimizing Iowans again.”

Miller Alleges Additional False Claims by Health Center Inc.
Beyond assisting Americare in completing prohibited sales, Miller alleges that Health Center made additional false claims to consumers through dubious sales practices.

A Health Center script obtained by the Consumer Protection Division shows that Health Center directed telemarketers to falsely claim that its “patented” stem-cell remedy replenishes and releases a person’s own stem cells, which then “regenerate” heart tissue and lung tissue.

“The company’s claim to have a patent on its stem-cell product is blatantly false,” Miller said. The company had merely submitted a patent application, which may or may not ever be granted.

Miller said that other Health Center scripts contained similar unsupportable claims, including that the company’s marine phytoplankton pills would “alkalize” your body “so you can’t grow cancer cells,” and that its human growth hormone product was proven beneficial for a number of severe conditions, and was “the only thing that shows positive results on Alzheimer’s disease.”

The Consumer Protection Division will contact Iowans who are eligible for Health Center Inc. product refunds.

General Cautions Regarding Supplements & Homeopathic Remedies
Miller cautions Iowans to be wary of anyone claiming miraculous health benefits for their products, particularly so-called homeopathic remedies and dietary supplements.

“By federal law, dietary supplement sellers in general are exempt from having to prove their products’ safety and efficacy before they market them to the public,” Miller said. “That’s a source of concern in itself, but the concern is amplified when cynical operators exaggerate the benefits of unproven products to pry hundreds or thousands of dollars from the ailing and elderly.”

Miller also cautions Iowans about extraordinary health claims for products that appear on websites and come from telephone pitches.

“Just like the traveling medicine shows of another era, modern telemarketers of ‘snake oil’ make aggressive claims of miraculous cures,” Miller said. “Consumers can best protect their health – and their pocketbooks – by opting for proven treatments recommended by trusted medical professionals.”

For more information or to file a complaint, contact the Consumer Protection Division through the Attorney General’s website at www.IowaAttorneyGeneral.gov or email directly to consumer@ag.iowa.gov. Consumers can also call the Consumer Protection Division at 515-281-5926, or outside the Des Moines area, toll free, at 1-888-777-4590.

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